When I read about wage stagnation, I can’t help but think that it should be a concern, even for those largely untouched by the matter.
In an article Sunday’s New York Times, MIT economist Erik Brynjolfsson correctly points out “There is no economic law that says that technological progress has to benefit everyone or even most people.” And of course it is more than just a matter of technological progress that affects economic growth. But overall as the economy has grown in recent decades, the benefits of that growth have not been shared as equally as in the past. Again, there is not hard fast economic law that says it should.
There is, however, another reason why stagnation should matter. It has to do with the intangibles that support an economy. For decades the United States has been draw for people — and their wealth of energy, ideas, and capital — to come to this country for all that it offered that was not found in other parts of the world. Along with the benefits of strong social services and security, perhaps the most attractive draw has been opportunity.
If we let our social services and infrastructure crumble around us, that’s one story; but if we start to neglect the conditions of shared growth and opportunity, then that is something else altogether. We shouldn’t take it for granted that the world’s talent will continue to flock to American shores and contribute to a better future.
Right now it might seem absurd to think that American culture and society should lose out to a foreign competitor, but that kind of hubris is bad for American citizens today and a threat for the future. Look at the global changes that have occurred in just the last 30 years. The modernization of the world and its economy is happening at an incredible pace. If we neglect our working and middle classes, why shouldn’t we expect other economies to benefit.
Yes, we have democracy and enormous economic size that will sustain American competitiveness, but why compromise our competitive advantages? Government economic policy that caters to those gaining the most from our growth has not benefited the majority of working Americans equally and yet those benefiting most likely would not have the level of economic growth they have enjoyed without the benefit of working Americans.
So why shouldn’t those who benefit the most invest more for their gains? In the long run, I believe you can make the argument that it would be a good investment in a strong American future.
- Growing social and wealth inequality in America (presstv.com)
- Robots and Robber Barons (nytimes.com)
- Inequality is rising. Should we blame robots or the government? Or both? (washingtonpost.com)
- The Unequal State of America (reuters.com)